121624 HRA AgendaREGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING
RICHFIELD MUNICIPAL CENTER, COUNCIL CHAMBERS
DECEMBER 16, 2024
7:00 PM
Call to Order
Open Forum
Please refer to the HRA agenda and minutes web page for additional ways to submit comments.
Appr oval of t he M inut es
Approval of the minutes of the Regular Housing and Redevelopment Authority meeting of November 18, 2024.
AGENDA APPROVAL
1.Approval of the Agenda
2.Consent Calendar contains several separate items which are acted upon by the HRA in one motion.
Once the Consent Calendar has been approved, the individual items and recommended actions have
also been approved. No further HRA action on these items is necessary. However, any HRA
Commissioner may request that an item be removed from the Consent Calendar and placed on the
regular agenda for HRA discussion and action. All items listed on the Consent Calendar are
recommended for approval.
A.Consideration of the approval of an Amendment to the Agreement with the Center for Energy and
Environment to provide loan and remodeling advising services to Richfield homeowners for 2025.
Staff Report No. 25
3.Consideration of items, if any, removed from Consent Calendar
OTHER BUSINESS
4.Consideration of approval of a Funding Agreement in the amount of $750,000 with Hoptimistic LLC.
Staff Report No. 26
HRA DISCUSSION ITEMS
5.HRA Discussion Items
EXECUTIVE DIRECTOR REPORT
6.Executive Director's Report
CLAIMS
7.Claims
8.A djournment
Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at least 96
hours in advance to the City Clerk at 612-861-9739.
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Regular Meeting
November 18, 2024
Chair Vrieze Daniels called the meeting to order at 7:00 p.m. in the Council Chambers.
HRA Members Erin Vrieze Daniels, Chair; Mary B. Supple; Sean Hayford Oleary; Gordon Hanson;
Present: John Young.
HRA Members Absent:
Staff Present: Melissa Poehlman, Executive Director; Hilary Lovelace, Housing Specialist; Mark
McKinley, Administrative Assistant.
OPEN FORUM
Chair Vrieze Daniels noted the process of remote Open Forum participation has changed. Executive
Director Poehlman explained remote participation can be requested by calling ahead with details provided
after the participant contacts Housing and Redevelopment Authority (HRA) staff person via phone call or
through the website. No residents participated in the Open Forum public comment opportunity.
APPROVAL OF THE MINUTES
MOTION: made by Hanson, seconded by Young to approve the minutes of the regular Housing and
Redevelopment Authority Minutes from October 21, 2024.
Motion carried: 5-0
ITEM #1 APPROVAL OF THE AGENDA
MOTION: made by Supple, seconded by Young to approve the agenda.
Motion carried: 5-0
ITEM #2 APPROVAL OF THE CONSENT CALENDAR
Executive Director Poehlman presented the consent calendar.
A. Consider the approval of a resolution accepting contributions for the 2024 Tour of Remodeled
CALL TO ORDER
Homes. (Staff Report No. 21)
B. Consideration of a resolution authorizing the execution of the First Amendment to the Declaration of
Covenants, Restrictions, and Easements between the Housing and Redevelopment Authority and
Brixmor for the property at 140 – 66th Street West. (Staff Report No. 22)
C. Consideration of the updated Richfield Housing and Redevelopment Authority Administrative Plan
to conform with the new Housing Opportunity Through Modernization Act final ruling under the
Section 8 Housing Choice Voucher Program. (Staff Report No. 23)
MOTION: made by Young, seconded by Supple to approve the consent calendar items 2A-C.
Motion carried 5-0
ITEM #3 CONSIDERATION OF ITEMS, IF ANY, REMOVED FROM THE CONSENT CALENDAR
None.
ITEM #4 CONSIDERATION OF A HOUSING AND REDEVELOPMENT AUTHORITY LOAN
FORGIVENESS POLICY
Housing Specialist Lovelace presented a report highlighting changes from the previous year, noting an
increase in requests for assistance and explained the loan forgiveness policy excludes loans with automatic
forgiveness. Commissioner Hayford Oleary asked for clarification on language regarding HRA mortgages
for deceased borrowers, with Housing Specialist Lovelace explaining a rise in dispossession requests from
heirs, particularly in reverse mortgage cases.
Executive Director Poehlman discussed the loan forgiveness policy's approval process. Commissioner
Supple expressed support and inquired about handling forgivable loans and balances, with Executive
Director Poehlman explaining that pro-rated forgiveness is provided when balances cannot be paid.
Commissioner Hanson and Chair Vrieze Daniels supported the policy, with Poehlman agreeing to provide
an annual report on new loans forgiven.
MOTION: made by Supple, seconded by Hanson to adopt a resolution approving the Housing and
Redevelopment Authority Loan Forgiveness Policy.
Motion carried: 5-0
Commissioner Hayford Oleary sought clarification regarding subsidies being granted for unrelated financial
hardships. Executive Director Poehlman assured the policy would apply only to clear cases, and noted any
questionable cases would be reviewed by the HRA Commission. Commissioner Hayford Oleary thanked
Poehlman for the explanation and confirmed his support for the policy.
ITEM #5 HRA DISCUSSION ITEMS
Chair Vrieze Daniels thanked staff for the work done related to the 2024 Tour of Remodeled Homes.
ITEM #6 EXECUTIVE DIRECTOR’S REPORT
Executive Director Poehlman referenced a memo related to the city’s decision regarding CDBG funds.
ITEM #7 CLAIMS
MOTION: made by Young, seconded by Hayford Oleary to approve the following claims:
U.S. BANK 11/18/2024
HRA Checks: #37145 – 37163 $19.332.31
Section 8 Checks: #136251 - 136326 $205,541.64
TOTAL $224,873.95
Motion carried: 5-0
ITEM #8 ADJOURNMENT
The meeting was adjourned by unanimous consent at 7:15 p.m.
Date Approved: December 16, 2024
Erin Vrieze Daniels
HRA Chair
Mark McKinley Melissa Poehlman
Administrative Assistant Executive Director
AGENDA SECTION:Consent Calendar
AGENDA ITEM #2.A.
STAFF REPORT NO. 25
HOUSING AND REDEVELOPMENT AUTHORITY
MEETING
12/16/2024
Julie Urban, Asst. Community Development DirectorREPORT PREPARED BY:
EXECUTIVE DIRE CTOR RE VIEW: Melissa Poehlman, Executive Director
12/10/2024
ITEM FOR COUNCIL CONSIDERATION:
Consideration of the approval of an Amendment to the Agreement with the Center for Energy and
Environment to provide loan and remodeling advising services to Richfield homeowners for 2025.
EXECUTIVE SUMMARY:
The Housing and Redevelopment Authority (HRA) has contracted with the Center for Energy and
Environment's Lending Center (CEE) to provide loan and remodeling advising services to Richfield residents
since 2017.
Approval of an Amendment to the Agreement is needed for CEE to continue providing services to Richfield
homeowners. The proposed Amendment to the Agreement includes the following changes:
1.An extension of services through December 31, 2025.
2.A budget of $45,000 for the Interest Subsidy Program and $11,250 for the Remodeling Advisor
Program.
Costs for loan origination and remodeling adviser visits remain the same.
RECOMMENDED ACTION:
By motion: Approve an Amendment to the Agreement with the Center for Energy and Environment to
provide lending and remodeling advising services for 2025.
BASIS OF RECOMMENDATION:
A.HISTORICAL CONTEXT
CEE's Lending Center has extensive experience in providing lending and remodeling services and
offers these services to several communities in the metro area.
Through October of 2024, CEE provided 22 remodeling advisor visits and originated three Fix-Up
Fund loans.
B.EQUITABLE OR STRATEGIC CONSIDERATIONS OR IMPACTS
Supporting homeowners in maintaining their homes helps facilitate the Strategic Plan initiative to
maintain Richfield as an affordable place to live.
C.POLICIES (resolutions, ordinances, regulations, statutes, exc):
Extending the Agreement with CEE would enable the City to continue offering valuable remodeling
resources to its residents and meet the Comprehensive Plan goal of supporting the rehabilitation and
upgrading of the existing housing stock.
D.CRITICAL TIMING ISSUES:
The current Agreement with CEE will expire on December 31, 2024. An Amendment to the Agreement
is necessary in order to continue offering lending and remodeling services to Richfield residents.
E.FINANCIAL IMPACT:
The HRA pays CEE a $5,000 administrative fee, a loan origination fee for each loan processed, and
$250 for each remodeling advising visit.
Funds are designated in the 2025 Budget for these expenses.
HRA and Minnesota Housing funds are available to write down the Fix-Up Fund interest rate to three
percent.
The current amendment exceeds $50,000, requiring HRA approval.
F.LEGAL CONSIDERATION:
The HRA Attorney reviewed the original Agreement.
ALTERNATIVE RECOMMENDATION(S):
Decide not to approve the Amendment to the Agreement.
PRINCIPAL PARTIES EXPECTED AT MEETING:
N/A
ATTACHMENTS:
Description Type
Amendment Contract/Agreement
Exhibit A7- Guidelines Exhibit
Exhibit B7 - Budget Exhibit
AMENDMENT 7 to the LOAN ORIGINATION AGREEMENT
Between
HOUSING AND REDEVOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD
And
CENTER FOR ENERGY AND ENVIRONMENT
City of Richfield Home Improvement Loan Program
The Agreement made the 1st day of October, 2017 by and between the HOUSING AND
REDEVOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, with offices at
6700 Portland Ave, Richfield, MN 55423, (the “Authority”), and the CENTER FOR ENERGY
AND ENVIRONMENT, with its offices at 212 3rd Avenue North, Suite 560, Minneapolis,
Minnesota 55401 (“CEE”) is hereby amended.
Exhibit A6 shall be replaced by Exhibit A7 (attached)
Exhibit B6 shall be replaced by Exhibit B7 (attached)
Section 5. Term and Termination of the agreement shall read:
5.1
Unless earlier terminated as provided in the following paragraphs, this Agreement shall
become effective on January 1, 2025 and continue through December 31, 2025.
All other sections of the contract shall remain as written in the original and amended agreements.
IN WITNESS WHEREOF, the parties hereunder set their hands as of the date written below:
HOUSING AND REDEVOPMENT
AUTHORITY IN AND FOR THE CITY
OF RICHFIELD
CENTER FOR ENERGY AND
ENVIRONMENT
By ___________________________ By __________________________
Date __________________________ Date _________________________
CEE #
By ___________________________ TAX ID 41-1647799
Date __________________________
Exhibit A7 Page 1
Agreement between Richfield Housing and Redevelopment Authority and Center for Energy and Environment
EXHIBIT A7
PROGRAM GUIDELINES
This document includes guidelines for the
MHFA Interest Subsidy Program
Exhibit A7 Page 2
Agreement between Richfield Housing and Redevelopment Authority and Center for Energy and Environment
RICHFIELD LOAN PROGRAM GUIDELINES
The HOUSING AND REDEVELOPMENT AUTHORITY is making funds available for homeowners to assist
with home maintenance and energy improvements. The Richfield Interest Subsidy Program is designed
to supplement existing loan programs available from MHFA, CEE, private lenders, and other housing
resources. This program is not intended to be the sole source of improvement funds available to the
City. Center for Energy and Environment shall serve as the administrator for the Richfield Interest
Subsidy Program and will secure the most beneficial financing based on the borrower’s needs
independent of the funding source.
Richfield Interest Subsidy Program
Interest Rate: 3% fixed
Amortization Type: Amortizing (Monthly Payments Required)
Loan Amount: Minimum of $2,000 and Maximum of $35,000.
Total Project Cost: The borrower must have sufficient funds necessary to cover the cost of the entire
project (as outlined in the bid(s). Additional funds may come from personal savings, gifts, or other loan
funds.
Loan term: Generally, one year per $1,000 borrowed. This will be somewhat flexible depending on the
size of the loan and the borrower’s ability to repay the loan. The minimum term is 1 year; the maximum
term will be 15 years.
Eligible Properties: 1-4 unit owner-occupied properties located within the geographical boundaries of
the City of Richfield. Townhomes and Condominiums are eligible, subject to Association Bylaws.
Properties may be held in a Contract for Deed.
Ineligible Properties: Dwellings with more than 4 units, cooperatives, manufactured homes, time
shares, properties held in the name of a trust and properties used for commercial purposes.
Eligible Borrowers: All borrowers must be legal residents of the United States, as evidenced by a social
security number, Including: U.S. Citizens, Permanent Resident Aliens, Non-Permanent Resident Aliens.
TAX IDENTIFICATION NUMBERS (ITIN) ARE NOT ACCEPTABLE.
Ineligible Borrowers: Including but not limited to: - Businesses, Foreign Nationals, Non-Occupant Co-
Borrowers, and Properties held in the name of a trust.
Exhibit A7 Page 3
Agreement between Richfield Housing and Redevelopment Authority and Center for Energy and Environment
Ownership/Occupancy: Owner- occupied only.
Loan - to - Value Ratio: The ratio of all loans secured by the property, including the new loan, should
not exceed 110% of the property value. Half of the improvement value may be added to the initial
property value.
Income Limit: The property owner’s household income shall not exceed 115% of the HUD Regional
Median Income based on household size or the MHFA income limit, whichever is less. Income for
eligibility will be determined by the projected income for the next 12 months per MHFA guidelines...
This limit adjusts annually.
Debt - to - Income Ratio: Applicant must have the ability to repay the loan. An applicant who has a
debt-to-income ratio more than 48% will be ineligible to receive financing.
Credit Requirements: All borrowers must have a minimum credit score of 620 and: 1) All mortgage
payments must be current and reflect no 30-day late payments history in the past 12 month period
(without reasonable explanation) 2) All real estate taxes must be current. 3) No outstanding
judgements or collections (excluding medical). 4) Bankruptcy must have been discharged for at least 18
months prior to loan closing. 5) The redemption period on prior foreclosures must have occurred at
least 18 months prior to the loan application date. 6) Generally, no more than two 60-day late
payments on credit report. Any 60 day late requires a documented explanation and reasonable reasons:
medical, unemployment, divorce. 7) No defaulted government loans.
Multiple Loans per Property: More than one loan per property is allowed, however, the outstanding
balance(s) cannot exceed $35,000.
Eligible Use of Funds: Same as the current MHFA guidelines
Ineligible Use of Funds: Payment for work initiated prior to the loan being approved and closed, unless
due to emergency. Recreation or luxury projects (pools, lawn sprinkler systems, playground equipment,
saunas, whirlpools, etc.), furniture, non-permanent appliances, and funds for working capital, debt
service, homeowner labor or refinancing existing debts are NOT allowed.
Bids: Only one bid/estimate is required. All contractors must be properly licensed.
Sweat Equity / Homeowner Labor: Work may be performed by property owners on a “sweat equity”
basis. Loan funds may be used only for the purchase of materials. Loan funds cannot be used to rent
tools/ equipment or compensate for labor. The property owner will provide evidence to CEE that they
have the ability to complete the work and complete a Homeowner Labor Agreement.
Remodeling Advisor Visit (RAV): The Remodeling Advisor Visit provides rehabilitation and/or
remodeling advice upon request of the resident. The intent is to help residents improve their homes by
providing technical assistance before and during the bidding and construction process. All homeowners
are eligible for this service regardless if applying for the Richfield Interest Subsidy Program or not. This
visit is not required.
Loan Security: Determined by MHFA requirements.
Exhibit A7 Page 4
Agreement between Richfield Housing and Redevelopment Authority and Center for Energy and Environment
Borrower Fees: Borrower will be responsible for a 1% Origination Fee (which may be financed),
mortgage filing and service fees, flood certificate fee, credit report fee, document preparation fee and
any other applicable closing fees.
Underwriting Decision: Applicants must have acceptable credit history. CEE will approve or deny loans
based on a credit report, income verification and other criteria as deemed necessary through CEE’s
underwriting guidelines. CEE’s decision shall be final.
Work Completion: All work must be completed within 9 months of the loan closing.
General Program Conditions
Application Processing: Loans will be distributed on a first come first serve basis as borrowers qualify.
Applicants must provide a completed application package including the following in order to be
considered for funding.
Completed and signed application form
Proof of income
Proof of Identity (drivers license, passport, etc.)
Bids or estimates for proposed projects
Other miscellaneous documents that may be required.
Program Costs: Loan origination, interest subsidy and remodeling advisor visit fees will be paid out of
the Program Budget. Loan program marketing efforts will be billed directly to the City of Richfield and is
a separate expense should the city choose to commission CEE for marketing support.
Total Project Cost: It is the borrower’s responsibility to obtain the amount of funds necessary to finance
the entire cost of the work. In the event the final cost exceeds the original loan amount, the borrower
must obtain the additional funds and show verification of the additional funds in order to be approved
for the loan.
Disbursement Process: Funds are disbursed to the borrower(s)
Exhibit B7
EXHIBIT B7
TOTAL PROGRAM BUDGET $56,250
RICHFIELD LOAN PROGRAM BUDGET
A.MHFA Interest Subsidy Program Budget Allocation (includes Annual Administration
Fee and Interest Subsidy):
Remodeling Advisor Visit Budget:
2025: $45,000
2025: $11,250
Budget Notes:
1.CEE shall submit monthly invoices for loan program and administrative fees for that
period.
2.Services performed by CEE will be funded from the Total Program Budget as stated
above and paid in accordance with the following schedule.
(1)Annual Administration Fee $5,000
(2) MHFA Interest Subsidy $varies on loan amount and term
(3)Remodeling Advisor Visit $250.00 per visit
The Annual Administration Fee shall be payable on January 1st of each year the
contract is active.
3.Marketing
Marketing efforts will be supported by CEE and marketing costs are not included in the
administrative budget. Hourly rates are inclusive of all overhead expenses and will be
charged only for hours directly related to the labor of all program marketing. CEE will
also be reimbursed by City of Richfield for any non-labor, out-of-pocket expenses
relating to these services on a dollar-for-dollar basis.
AGENDA SECTION:OTHER BUSINESS
AGENDA ITEM #4.
STAFF REPORT NO. 26
HOUSING AND REDEVELOPMENT AUTHORITY
MEETING
12/16/2024
Jan Youngquist, Economic Development ManagerREPORT PREPARED BY:
EXECUTIVE DIRE CTOR RE VIEW: Melissa Poehlman, Executive Director
ITEM FOR COUNCIL CONSIDERATION:
Consideration of approval of a Funding Agreement in the amount of $750,000 with Hoptimistic LLC.
EXECUTIVE SUMMARY:
Hoptimistic LLC (Developer), an affiliate of Luce Line Brewing, is under contract to purchase the remaining
Lyndale Gardens redevelopment parcel and the adjacent amphitheater located at 64th Street West and
Lyndale Avenue South (Property). The Property has been vacant and identified for redevelopment for more
than 10 years. The Developer is requesting assistance from the Housing and Redevelopment Authority (HRA)
in the amount of $750,000 to facilitate land acquisition and development of the Property.
The Developer is proposing to construct an approximately 7,500 square foot building that will include a food
hall restaurant, taphouse, and private event space along with a patio overlooking Richfield Lake
(Development). The food hall concept includes space for three food vendors with a shared kitchen, providing
an opportunity for food truck owners to expand their business to a bricks and mortar location. The Developer
plans to serve beer produced at its existing brewery in Plymouth, as well as wine and craft cocktails. No
brewing would be done on site.
Costs associated with the Development are estimated to be approximately $4,900,000 for land acquisition,
development and startup costs. Due to high construction prices as well as the costs associated with opening a
restaurant, the Development is not financially feasible without the requested assistance from the HRA.
Therefore, the Developer is seeking approval of the Funding Agreement prior to proceeding with a land use
application. If the Funding Agreement is approved by the HRA, the Project will go through a separate land
use approval process in 2025.
In 2022, the HRA and City Council approved a Spending Plan in accordance with the temporary authority
that was provided by the Legislature to use unobligated tax increment from existing Tax Increment Financing
(TIF) Districts to help stimulate private development that would not otherwise occur without assistance. Priority
for funding was placed on goals identified in the Strategic Plan, including a vibrant downtown and increased
diversification of the tax base through commercial development.
The attached Funding Agreement proposes to use Spending Plan dollars to provide the requested assistance
for the Development. The assistance would be in the form of a no-interest forgivable loan that would be
provided when the Developer closes on the Property and forgiven when the Developer obtains a Certificate of
Occupancy for the Development. The funds must be expended and construction must commence before
December 31, 2025.
RECOMMENDED ACTION:
12/11/2024
By motion: Approve a Funding Agreement in the amount of $750,000 with Hoptimistic LLC for
development of a restaurant and taphouse at Lyndale Gardens.
BASIS OF RECOMMENDATION:
A.HISTORICAL CONTEXT
The Lyndale Garden Center closed its doors in 2006. The site was purchased by The Cornerstone
Group in 2011 and a Planned Unit Development (PUD) including housing, a grocery store, 9,000
square feet of retail space, 2,600 square feet of restaurant, and an outdoor activity space was approved
by the City Council (Council) in March 2013.
In December 2013, the Council approved an amendment to the PUD which allowed up to 7,000 square
feet of restaurant space on the Property.
The Lakewinds Food Co-op opened for business in 2014 on the south half of the Lyndale Gardens site.
The amphitheater and other quasi-public amenities, including a connection to the Richfield Lake path,
were completed in 2017.
In 2018, the Council approved an amendment to the PUD, which included approximately 6,000 square
feet of retail space on the Property that would coordinate with the already-constructed adjacent outdoor
activity space and amphitheater.
The Henley Apartments and Lakeside at Lyndale condominiums were completed in 2020. The final
phase of the overall Lyndale Gardens redevelopment calls for a commercial use on the Property.
Benefactor Brewing submitted a proposal to develop a microbrewery and taproom on the Property in
2021.
In August 2021, the HRA approved a Contract for Private Development (CPD) with Benefactor
Brewing LLC, which stated that the HRA would provide a forgivable loan of up to $500,000 for the
development. The CPD was not executed, as Benefactor Brewing withdrew its proposal to develop the
Property.
In November 2022, the HRA adopted a Spending Plan that would utilize unobligated tax increment to
provide assistance for private development that consisted of construction or substantial rehabilitation of
buildings and would create or retain jobs, including construction jobs.
Over the last two years, staff has had conversations with various parties interested in developing
housing, medical offices, daycares, and drive-thru coffee shops on the Property. These proposed uses
did not demonstrate how they would coordinate with the adjacent outdoor activity space and
amphitheater, as called for in the PUD.
To incentivize redevelopment of an active commercial use on the site, the HRA entered into a
Memorandum of Understanding (MOU) with the owner of the Property, Lyndale Gardens LLC, in
November 2023. The MOU stated that the HRA would consider providing financial assistance of up to
$500,000 toward capital costs for a development that meets several of the HRA’s goals for the site (as
described in the attached document).
The HRA held a closed work session on September 16, 2024 to discuss potentially purchasing the
Property but did not direct staff to pursue land acquisition discussions with Lyndale Gardens LLC.
B.EQUITABLE OR STRATEGIC CONSIDERATIONS OR IMPACTS
The Strategic Plan places a priority on Community Development and identifies a vibrant downtown as a
desired outcome, by proactively marketing downtown and increasing the number of businesses.
The Strategic Plan also calls for increased diversification of the tax base through commercial
development. In 2022, the HRA and Council adopted the Spending Plan to specifically advance this
goal.
C.POLICIES (resolutions, ordinances, regulations, statutes, exc):
The 2040 Comprehensive Plan (Comp Plan) guides the Property and surrounding area as Mixed Use
with the intent of creating a city center that would serve as a downtown. The Comp Plan states that the
city center is expected to include a mix of residential (50%), shopping, recreational, and business uses
(50%).
The 2013 Lakes at Lyndale Connectivity Plan (Connectivity Plan) provides guidance for the connections
and improvements through the downtown area to promote a more livable and thriving community. The
Connectivity Plan recommends that a pedestrian and visual connection between Lyndale Avenue and
Richfield Lake be provided through the Property as a gateway to the adjacent outdoor activity and
recreational space.
The amended Lyndale Gardens PUD that was approved by the Council in 2018 called for
approximately 6,000 square feet of retail space on the Property that would coordinate with the already-
constructed adjacent outdoor activity space and amphitheater.
In 2021, the S tate L egislature provided temporary authority to use unobligated tax increment from
existing TIF D istricts to help stimulate private development that would not otherwise occur without
assistance prior to D ecember 31, 2025.
The S pending P lan that was adopted by the HRA and C ouncil in 2022 placed a preference on
providing funding assistance for projects that help meet priorities from the S trategic P lan, including a
vibrant downtown that includes both housing and businesses and an increased tax base through
redevelopment that advances the C omp P lan.
D .C R IT IC AL T IMIN G IS S U E S:
The D eveloper plans to close on acquisition of the property in S pring 2025, contingent on obtaining land
use approvals for the D evelopment. The D evelopment is not feasible without financial assistance;
therefore the D eveloper is seeking approval of the F unding A greement prior to proceeding with a land
use application.
In accordance with state law, projects receiving financial assistance through the S pending P lan must
commence prior to D ecember 31, 2025.
E .F IN AN C IAL IMPAC T:
F inancial assistance in the amount of $750,000 will come from unobligated tax increment as identified in
the S pending P lan adopted by the HRA and C ouncil in 2022.
F.L E GAL C ON S ID E R AT ION:
E hlers, the HRA’s financial advisor, reviewed the D eveloper’s financial assistance request and
determined that it meets the requirements of the S pending P lan and the temporary authority provided
through MN S tatute 469.176 S ubd. 4n.
The attached F unding A greement was drafted by the HRA A ttorney.
ALTE R N AT IV E R E C O MME N D ATIO N(S):
Approve with revisions to the Funding Agreement.
Do not approve the Funding Agreement.
P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G:
Tim Naumann, owner of Luce Line Brewing
AT TAC H ME N T S:
D escription Type
F unding A greement C ontract/A greement
L ocation and C omp P lan Map B ackup Material
HRA Goals for Redevelopment B ackup Material
P roject L etter and C oncept P lans B ackup Material
395323v2 JAE RC125-320
1
FUNDING AGREEMENT
THIS FUNDING AGREEMENT (the “Funding Agreement”), made and entered into as of
the 16th day of December, 2024 by and between, the Housing and Redevelopment Authority in
and for the City of Richfield, Minnesota, a Minnesota public body corporate and politic (the
“Authority”) and Hoptimistic LLC, a Minnesota limited liability company (the “Developer”).
BACKGROUND
On November 21, 2022 and December 13, 2022, the Board of the Authority and the
Richfield City Council, respectively, approved a spending plan (the “Spending Plan”) which
authorizes the Authority to expend current cash balances on hand from three tax increment districts
for development activities which will create or retain jobs and which are commenced not later than
December 31, 2025. Pursuant to the Spending Plan, the Authority is authorized to spend
Unobligated Tax Increments (as defined in the Spending Plan) for any private development in the
City for which the Authority finds that the private development will create or retain jobs (including
construction jobs); that the private development will commence before the required date and that
such construction would not have commenced before the required date without the assistance
under the Spending Plan.
The Developer has requested assistance from the Authority in the amount of $750,000 to
assist in the financing of land acquisition and construction of a food hall restaurant and taphouse
on property located in Richfield, Minnesota (the “City”), legally described in the attached Exhibit
A (the “Property”). The Developer will commence development activities on the Property, as
described in the attached Exhibit B, following the purchase of the Property, and prior to December
31, 2025.
The Property has been vacant for a significant period of time and in order to cause the
Property to be redeveloped in a manner that furthers the goals in the City’s Comprehensive Plan,
the 2023-2026 Strategic Plan, and other City plans and objectives, the Authority has agreed to
grant the Developer’s request and provide such funding in accordance with the terms herein.
NOW THEREFORE, in consideration of the mutual covenants and undertaking and
understandings of the parties, the sufficiency of which is hereby acknowledged, the parties agree
as follows:
I. ASSISTANCE PROVIDED
1.01 Authority Funding of Certain Activities. The Authority agrees to provide funds to
the Developer in the amount of up to $750,000 to assist the Developer in the land acquisition and
development of the Property. The funds will be provided to the Developer at the closing on the
Developer’s purchase of the Property upon the Authority being reasonably satisfied, based on
evidence from the Developer, that:
395323v2 JAE RC125-320
2
(i)the Developer has sufficient additional funds, including Developer equity, to pay
the full purchase price for the Property;
(ii)the Developer has or will obtain sufficient funds, including Developer equity, to
pay the cost of the development activities described on the attached Exhibit B, and
has or will enter into contracts providing for such work;
(iii)the Developer has received land use entitlements from the City for the development
activities described on the attached Exhibit B;
(iv)the development activities will create or retain jobs, including construction jobs;
(v)the jobs described in Section 1.08 will be created during the completion of the
development activities described in Exhibit B;
(vi)construction will commence before December 31, 2025, and would not have
commenced before that date without the assistance; and
(vii)the funds will be expended for acquisition or development activities prior to
December 31, 2025.
1.02 Source of Assistance. The financial assistance provided hereunder (the
“Assistance”) is from the sources identified in the Spending Plan approved by the City Council on
December 13, 2022, and approved by the Board of the Authority on November 21, 2022, and from
no other source. Neither the City nor the Authority shall have any obligation to provide funds
beyond the amounts available under the Spending Plan.
1.03 Form of Assistance. The Assistance will be provided in the form of a loan in the
principal amount of $750,000. The loan shall not accrue interest.
1.04 Loan, Release. The loan will be released and forever discharged upon:
(i)the Developer providing the Authority with sufficient evidence that the
development activities described in Exhibit B have been completed as certified by
the City Building Official; and
(ii)the Developer providing the Authority with written evidence, in the form of a
certificate from the construction manager of the development activities, that the
jobs described in Section 1.08 were created.
(iii)the Developer providing the Authority with evidence satisfactory to the Authority
Executive Director that all contractors, subcontractors, and project laborers have
been paid.
Upon satisfaction of these requirements, the Authority will provide the Developer with an
instrument in recordable form discharging and releasing any mortgage described in Section 1.05
below, to be recorded at Developer’s expense.
1.05 Loan, Security. The loan will be secured by a mortgage in substantially the form
of the attached Exhibit C. The mortgage will be initially recorded by the Developer against the
Property at Developer’s expense.
395323v2 JAE RC125-320
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1.06 Security, Subordination. The Authority acknowledges that its mortgage on the
Property in the amount of $750,000 will be subordinate to the lien of a loan provided to the
Developer for the acquisition and development of the Property.
1.07 Assistance not a Business Subsidy. The parties acknowledge that the assistance
provided by the Authority to the Developer under this Funding Agreement is not a business subsidy
pursuant to Minnesota Statutes, Sections 116J.993 to 116J.995 (the “Business Subsidy Act”).
1.08 Job Creation Requirement. The Developer has agreed to cause the creation of at
least 10 new full-time equivalent construction jobs at the Property.
1.09 Developer Covenant Regarding Assistance. The Developer acknowledges that it
would not have commenced the acquisition and development of the Property at this time without
the assistance provided pursuant to this Funding Agreement.
II.ADDITIONAL PROVISIONS
2.01 Conflict of Interests; Authority Representatives Not Individually Liable. The
Authority and the Developer, to the best of their respective knowledge, represent and agree that
no member, official, or employee of the Authority shall have any personal interest, direct or
indirect, in the Funding Agreement, nor shall any such member, official, or employee participate
in any decision relating to the Funding Agreement which affects his or her personal interests or
the interests of any corporation, partnership, or association in which he or she is, directly or
indirectly, interested. No member, official, or employee of the Authority shall be personally liable
to the Developer, or any successor in interest, in the event of any default or breach by the Authority
or County or for any amount which may become due to the Developer or successor or on any
obligations under the terms of the Funding Agreement.
2.02 Equal Employment Opportunity. The Developer, for itself and its successors and
assigns, agrees that during the construction of the development activities provided for in this
Funding Agreement it will comply with all applicable federal, state and local equal employment
and non-discrimination laws and regulations.
2.03 Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections
of the Funding Agreement are inserted for convenience of reference only and shall be disregarded
in construing or interpreting any of its provisions.
2.04 Notices and Demands. Except as otherwise expressly provided in this Funding
Agreement, a notice, demand, or other communication under the Funding Agreement by either
party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified
mail, postage prepaid, return receipt requested, or delivered personally; and
(a)in the case of the Developer, is addressed to or delivered personally to the
Developer at:
395323v2 JAE RC125-320
4
Hoptimistic LLC
13420 35th Place North
Plymouth, MN 55441
Attn: Anne K. Naumann
(b)in the case of the Authority, is addressed to or delivered personally to the Authority
at:
Housing and Redevelopment Authority
6700 Portland Avenue South
Richfield, MN 55423
Attn: Executive Director
or at such other address with respect to either such party as that party may, from time to time,
designate in writing and forward to the other as provided in this Section.
2.05 Counterparts. This Funding Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
2.06 Recording. The Authority may record a memorandum of this Funding Agreement
and any amendments thereto with the Hennepin County recorder. The Developer shall pay all
costs for recording.
2.07 Costs of Authority. Prior to the Authority providing the assistance to the Developer
described in Section 1.01, the Developer shall pay the Authority for all costs and expenses incurred
by the Authority to provide such assistance, including administrative costs, attorney’s fees and
expenses.
(The remainder of this page is intentionally left blank.)
395323v2 JAE RC125-320
S-1
IN WITNESS WHEREOF, the Authority has caused this Funding Agreement to be duly
executed in its name and behalf and its seal to be hereunto duly affixed and the Developer has caused
this Funding Agreement to be duly executed in its name and behalf as of the date first above written.
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
RICHFIELD, MINNESOTA
By:
Its: Chair
(SEAL)
By:
Its: Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of ____________,
2024, by Erin Vrieze Daniels, the Chair of the Housing and Redevelopment Authority in and for
the City of Richfield, Minnesota, a public body corporate and politic under the laws of the State
of Minnesota, on behalf of the Authority.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of ___________,
2024, by Melissa Poehlman, the Executive Director of the Housing and Redevelopment Authority
in and for the City of Richfield, Minnesota, a public body corporate and politic under the laws of
the State of Minnesota, on behalf of the Authority.
Notary Public
395323v2 JAE RC125-320
S-2
Execution page of the Developer to the Funding Agreement, dated the date and year first written above.
HOPTIMISTIC LLC
By:
Its: Managing Member
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of ___________,
2024, by Anne K. Naumann, the Managing Member of Hoptimistic LLC, a Minnesota limited
liability company, on behalf of the Developer.
Notary Public
395323v2 JAE RC125-320
A-1
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY TO BE ACQUIRED
Parcel 1: Lot 3, Block 1, Lyndale Gardens 2nd Addition.
Parcel 2: Outlot B, Lyndale Gardens.
395323v2 JAE RC125-320
A-1
EXHIBIT B
DEVELOPMENT ACTIVITIES
Development of an approximately 7,500 square foot building that will include a food hall restaurant,
taphouse, and private event space; a patio overlooking Richfield Lake; and associated site
improvements. The development will not include onsite brewing facilities.
395323v2 JAE RC125-320
B-1
EXHIBIT C
MORTGAGE
P. O. Box 198
Kennedy & Graven
This Indenture made this ______ day of __________, 2024, between
HOPTIMISTIC LLC, a Minnesota limited liability company, Mortgagor, and THE
HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF
RICHFIELD, MINNESOTA, a Minnesota public body corporate and politic under the laws
of the State of Minnesota, Mortgagee.
Witnesseth: That the said Mortgagor, in consideration of the sum of One ($1.00) Dollar and
other good, valuable and sufficient consideration, the receipt whereof is hereby
acknowledged, does hereby Grant, Bargain, Sell, and Convey unto the said Mortgagee, its
successors and assigns, Forever, all the tracts or parcels of land lying and being in the County
of Hennepin and State of Minnesota, described as follows, to-wit:
Lot 3, Block 1, Lyndale Gardens 2nd Addition.
To Have and to Hold the Same, Together with the hereditaments and appurtenances thereto
belonging to the said Mortgagee, its successors and assigns, forever. And the said Mortgagor,
for itself, and its successors and assigns, does covenant with the said Mortgagee, its successors
and assigns, as follows: That it is lawfully seized of said premises and has good right to sell
and convey the same; that the same are free from all encumbrances, save and except
reservations, restrictions and easements of record; that the Mortgagee, its successors and
assigns, shall quietly enjoy and possess the same; and that the Mortgagor will Warrant and
Defend the title to the same against all lawful claims not hereinbefore specifically excepted.
Provided, Nevertheless, That if said Mortgagor, its successors and assigns, shall keep and
perform each and every one of its obligations under and pursuant to Section 1.04 of that certain
Funding Agreement dated as of ___________, 20___ (the “Contract”), made and entered into
between Mortgagor and Mortgagee, and shall keep and perform all the covenants and
agreements herein contained, then this deed to be null and void, and to be released at the
Mortgagor's expense. This Mortgage secures a principal debt in the amount of Seven Hundred
and Fifty Thousand Dollars ($750,000) payable by Mortgagor to Mortgagee under the terms
of the Contract, and amendments thereto, between Mortgagor and Mortgagee.
And the Mortgagor, for itself, and its successors and assigns, does hereby covenant and agree
with the Mortgagee, its successors and assigns, to perform its obligations as above specified,
to pay all taxes and assessments now due or that may hereafter become liens against said
premises at least ten (10) days before penalty attaches thereto; to pay, when due, both principal
and interest of all prior liens or encumbrances, and to keep said premises free and clear of all
other liens or encumbrances; to commit or permit no waste on said premises and to keep them
395323v2 JAE RC125-320
B-2
in good repair; to complete forthwith any improvements which may hereafter be under course
of construction thereon, and to pay any other expenses and attorneys' fees incurred by said
Mortgagee, its successors or assigns, by reason of litigation with any third party for the
protection of the lien of this Mortgage.
That Mortgagor, does further covenant and agree that if any lien for labor, skill or material
shall be filed for record during the life of this Mortgage, upon or against the premises hereby
mortgaged, the said Mortgagor will, within thirty (30) days after the date of its filing for
record, either pay off the said lien and secure its satisfaction of record, or will protect the
Mortgagee against any loss or damage growing out of its enforcement, by furnishing a bond
for the same amount in the form and with the sureties to be approved by the Mortgagee.
In Testimony Whereof, the said Mortgagor has hereunto set its hand the day and year first
above written.
HOPTIMISTIC LLC
By:
Its:
STATE OF MINNESOTA )
)
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of
___________, 20__, by _______________________, the __________________ of
Hoptimistic LLC, on behalf of the Developer.
(Notary Stamp or Seal) Notary Public
This Instrument was drafted by:
Kennedy & Graven, Chartered
150 South Fifth Street, Suite 700
Minneapolis, MN 55402-1299
(612) 337-9300
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2040 Comprehensive Plan Designation
I:\GIS\Community Development\Case Maps\2024\Luce Line Lyndale Gardens Site.mxd
2040 Planned Land Use
Mixed Use
Comm unity Commercial
High Density Residential
Medium D ensity Residential
Low Density Residential
Park
Right-of-Way (ROW)
Lyndale Gardens Site
0 310 620155ft
Lakewinds Food Co-op
The HenleyApartmentsLakeside at LyndaleCondominiums
Amphithea ter
Subject Pro perty
!
A-2
Establishes uses (or a mix of uses) such as a restaurant, brewpub, coffee shop, retail store
or experiential/activity-based business.
Recognizes and elevates the site’s importance as a gateway to Richfield Lake, whose
natural and recreational amenities serve as a centerpiece of the Lakes at Lyndale
downtown area.
Includes a well-designed building and an inviting patio space that overlooks Richfield
Lake and the adjacent amphitheater.
Provides visual and pedestrian connections from Lyndale Avenue to the amphitheater and
the existing paths at Richfield Lake Park.
Embraces Richfield’s certification as a Silver-Level Bicycle Friendly Community by the
League of American Bicyclists and the site’s proximity to adjacent bicycle routes by
providing ample bicycle parking for employees and guests.
Activates the west and southwest portions of the property that are adjacent to the
amphitheater and existing pergola-covered seating area by providing outdoor gathering
spaces and including a pedestrian connection along the “dogleg” portion of the property
to the Lakewinds Co-op site.
Complements and builds off the existing public art in the area. This could be achieved
through art installations such as murals, sculpture, an artistic gateway feature, or other
forms of public art. The City of Richfield will consider adding any public art on the site
to the City’s Public Art Walking Tour.
EXCERPT FROM NOVEMBER 2023 MEMORANDUM OF UNDERSTANDING BETWEEN HRA AND
LYNDALE GARDENS, LLC
HRA FINANCIAL CONSIDERATIONS AND GOALS FOR REDEVELOPMENT OF THE
LYNDALE GARDENS COMMERCIAL PARCEL
The Richfield HRA will consider contributing up to $500,000 toward capital costs and
providing a 50% financial match for up to four (4) Sewer Availability Charge (SAC) fees to help
facilitate a commercial development on the site that serves as a destination where people can eat,
shop, or gather. A project receiving financial assistance should help achieve several of the
following goals for redevelopment of the site:
LUCE·LINE
BREWING CD.
Richfield Housing and Redevelopment Authority
6700 Portland Avenue
Richfield, MN 55423
Dear Commissioners,
November 11, 2024
Luce Line Brewing was established on November 20th , 2020. We set out to make great beer and be a
gathering place for the community, like an English Pub, where all are welcome.
Our beer is solid ... some even suggest it is great. We are pleased that the Minnesota Brewers Guild has
made Foggy Bottom Hazy IPA and New Zealand Joy Ride award winning beers through their annual
contest. Even more appreciated is that our customers are confident they can explore our wide range of
beers knowing each will be true to st yle and taste great. One recently exclaimed "this is the best beer I
have ever had in my life. Then recanted saying, no, on second thought, I better get a second just to
confirm."
Our brand is authentically Minnesotan and reflects the passions of our customers. We care about our
families and neighbors and believe in giving back to the community. We currently host a beer club, bike
club, running club, and book club with a variety of other neighborhood groups who meet at the brewery
regularly. We have raised and helped to raise over $300,000 for local charities since we started and
actively look for ways to engage through local philanthropy. We harvest our own honey from the apiary
on the roof of our brew house. We use it to make delicious beer and raise awareness of the importance
of pollinators. We host a wide range of events on a regular basis like trivia, cribbage, puzzle nights, or
comedy nights. Other times, it can be special occasion events such as Hot Dish Night or Chinese New
Year. Finally, we are working to create destination events, like Oktoberfest and our Summer Bike Rally.
Who we are is anchored in the concept of being Minnesotan and doing good, and fluid to the interests
and passions of our ever-growing and changing customer base.
Our vision for Richfield is informed by and leverages our first location and the amenities of the new
location. We will offer great beer and become the living room of Richfield being the place where all
belong. We will continue to do good within the community, connecting charitably. We will also offer a
range of clubs and ongoing activities. Finally, we will create destination events that are anchored in the
concept of being Minnesotan and doing good, and fluid to the interests and passions of Richfield.
Our tap house will be 7,500 square feet in its interior, with a patio area with an overlook of the lake both
connected using glass garage doors for easy back and forth flow. The interior will have ample windows
to bring the outside into the tap house and natural features of brick and wood to increase a feeling of
comfort. A key component of the offering will be private event spaces that individually will hold up to
SITE DATASTANDARD STALLS:HANDICAP STALLS:TOTAL STALLS:STALLS PER 1,000 SF:PARKING SUMMARYPARCEL AREA:IMPERVIOUS AREA:BUILDING:PAVEMENTS:TOTAL:PERVIOUS AREA:65 3 689.147,857 SF7,500 SF 16% 33,149 SF 69%40,649 SF 85%7,208 SF 15%PROPOSEDBUILD
ING< SCALE IN FEET >60120300
4125 Lakeland Ave North
Suite 200
Minneapolis, MN 55422
Phone: 763-533-7171
4125 Lakeland Ave North
Suite 200
Minneapolis, MN 55422
Phone: 763-533-7171